exhibit1016.htm


    
      Exhibit
10.16

       

       

    

    CHANGE OF CONTROL
AGREEMENT

    


    


    CHANGE OF CONTROL AGREEMENT
(this “Agreement”), dated effective as of August 6, 2008 (the “Agreement Date”),
between International Shipholding Corporation, a Delaware corporation (the
“Company”), and Manuel G. Estrada (the “Employee”).

     

    
 

    W
I T N E S S E T H:

    


    WHEREAS, the Board of
Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its stockholders to take steps designed to retain
the services of the Employee and to assure the full dedication of the Employee,
free from personal distraction, in the event of an actual or pending change of
control of the Company; and

    


    WHEREAS, the Board believes
that this agreement accomplishes these and other related
objectives;

    


    NOW, THEREFORE, the parties
agree as follows:

     

    


    ARTICLE
1

     

    CERTAIN
DEFINITIONS

     

    


    Section
1.1 Affiliate.  “Affiliate”
(and variants thereof) shall mean a Person that controls, or is controlled by,
or is under common control with, another specified Person, either directly or
indirectly.

     

    Section
1.2 Beneficial
Owner.  “Beneficial Owner” (and variants thereof), with respect
to a security, shall mean a Person who, directly or indirectly (through any
contract, understanding, relationship or otherwise), has or shares (i) the power
to vote, or direct the voting of, the security, or (ii) the power to dispose of,
or direct the disposition of, the security.

     

    Section
1.3 Cause.  (a)                                “Cause”
shall mean:

     

    (i) conviction
of the Employee of a felony or the Employee’s entry of a guilty plea or a plea
of no contest to a felony;

     

    (ii) willful
and continued engagement by the Employee in illegal conduct that is materially
and demonstrably injurious to the Company;

     

    (iii) habitual
intoxication during working hours, or habitual abuse of or addiction to a
controlled dangerous substance; or

     

    (iv) the
willful and continued failure of the Employee to perform substantially the
Employee’s duties with the Company or its Affiliates (other than any such
failure resulting from incapacity due to physical or mental illness or the
Employee’s termination of employment for Good Reason) for a period of 15 days
after a written demand for substantial performance is delivered to the Employee
by the Board which specifically identifies the manner in which the Board
believes that the Employee has not substantially performed the Employee’s
duties.

     

    (b) For
purposes of this Section 1.3, no act or failure to act on the part of the
Employee shall be considered “willful” unless it is done, or omitted to be done,
by the Employee in bad faith and without reasonable belief that the Employee’s
action or omission was in the best interests of the Company or its
Affiliates.  Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of a
senior officer of the Company or based upon the advice of counsel for the
Company or its Affiliates shall be conclusively presumed to be done, or omitted
to be done, by the Employee in good faith and in the best interests of the
Company or its Affiliates.  Any termination by the Company or any of
its Affiliates of the Employee’s employment during the Employment Term (as
defined in Section 1.8) shall not be deemed to be for Cause unless the
Employee’s action or inaction meets the foregoing standard and until there shall
have been delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Employee and the Employee is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Employee is guilty of the conduct
described in subparagraph (a) above, and specifying the particulars thereof in
detail.

     

    (c) No action
or inaction shall be deemed the basis for Cause unless the Employee is
terminated therefor within one year after such action or omission is known to
the Chief Executive Officer of the Company.

     

    (d) In the
event that the existence of Cause shall become an issue in any action or
proceeding between the Company and the Employee, the Company shall,
notwithstanding the finding of the Board referenced above, have the burden of
establishing that the actions or inactions deemed the basis for Cause did in
fact occur and do constitute Cause and that the Company has satisfied the
procedural requirements of this provision.

     

    Section
1.4 Change of
Control.  “Change of Control” shall mean:

     

    (a) the
acquisition by any Person of Beneficial Ownership of 30% or more of the
outstanding shares of the Company’s Common Stock, $1.00 par value per share (the
“Common Stock”), or 30% or more of the combined voting power of the Company’s
then outstanding securities entitled to vote generally in the election of
directors; provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control:

     

    (i) any
acquisition (other than a Business Combination which constitutes a Change of
Control under Section 1.4(c) hereof) of Common Stock directly from the
Company,

     

    (ii) any
acquisition of Common Stock by the Company or its subsidiaries,

     

    (iii) any
acquisition of Common Stock by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity controlled by the Company,
or

     

    (iv) any
acquisition of Common Stock by any entity pursuant to a Business Combination
that does not constitute a Change of Control under Section 1.4(c) hereof;
or

     

    (b) individuals
who, as of the Agreement Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Agreement Date whose election,
or nomination for election by the Company’s stockholders, was approved by a vote
of at least two-thirds of the directors then comprising the Incumbent Board
shall be considered a member of the Incumbent Board, unless such individual’s
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Incumbent Board; or

     

    (c) consummation
of a reorganization, share exchange, merger or consolidation (including any such
transaction involving any direct or indirect subsidiary of the Company), or sale
or other disposition of all or substantially all of the assets of the Company (a
“Business Combination”); provided, however, that in no
such case shall any such transaction constitute a Change of Control if
immediately following such Business Combination,

     

    (i) the
individuals and entities who were the Beneficial Owners of the Company’s
outstanding common stock and the Company’s voting securities entitled to vote
generally in the election of directors immediately prior to such Business
Combination have direct or indirect Beneficial Ownership, respectively, of more
than 50% of the then outstanding shares of common stock, and more than 50% of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, of the Post-Transaction Corporation
(as defined in Section 1.11 hereof), and

     

    (ii) except to
the extent that such ownership existed prior to the Business Combination, no
Person (excluding the Post-Transaction Corporation and any employee benefit plan
or related trust of either the Company, the Post-Transaction Corporation or any
subsidiary of either corporation) Beneficially Owns, directly or indirectly, 20%
or more of the then outstanding shares of common stock of the entity resulting
from such Business Combination or 20% or more of the combined voting power of
the then outstanding voting securities of such entity, and

     

    (iii) at least
a majority of the members of the board of directors of the Post-Transaction
Corporation were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

     

    (d) approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company.

     

    Section
1.5 Code.  “Code” shall
mean the Internal Revenue Code of 1986, as amended from time to
time.

     

    Section
1.6 Company.  “Company”
shall mean International Shipholding Corporation and shall include any successor
to or assignee of (whether direct or indirect, by purchase, share exchange,
merger, consolidation or otherwise) all or substantially all of the assets or
business of the Company that assumes and agrees to perform this Agreement by
operation of law or otherwise.

     

    Section
1.7 Disability.  “Disability”
shall mean a condition that would entitle the Employee to receive benefits under
the long-term disability insurance policy applicable to the Company’s officers
at the time either because the Employee is totally disabled or partially
disabled, as such terms are defined in the policy then in effect.  If
the Company has no long-term disability plan in effect, “Disability” shall occur
if (a) the Employee is rendered incapable because of physical or mental illness
of satisfactorily discharging his duties and responsibilities to the Company for
a period of 180 consecutive days, (b) a duly qualified physician chosen by the
Company and acceptable to the Employee or his legal representatives so certifies
in writing, and (c) the Board determines that the Employee has become
disabled.

     

    Section
1.8 Employment
Term.  “Employment Term” shall mean the period commencing on
the date of a Change of Control and ending on the second anniversary of such
date.

     

    Section
1.9 Good
Reason.  (a)   Any act or failure to act by the
Company or its Affiliates specified in this Section 1.9 shall constitute “Good Reason” unless the
Employee shall otherwise expressly agree in a writing that specifically refers
to this Section 1.9:

     

    (i) Any
failure of the Company or its Affiliates to provide the Employee with a
position, authority, duties and responsibilities at least commensurate in all
material respects with those held, exercised and assigned during the 180-day
period immediately preceding the Change of Control.  The Employee’s
position, authority, duties and responsibilities after a Change of Control shall
not be considered commensurate in all material respects with the Employee’s
position, authority, duties and responsibilities prior to a Change of Control
unless after the Change of Control the Employee holds an equivalent position
with, and exercises substantially equivalent authority, duties and
responsibilities on behalf of, either the Post-Transaction Corporation or the
Company;

     

    (ii) The
assignment to the Employee of any duties inconsistent in any material respect
with the Employee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
3.1(b) of this Agreement, or any other action that results in a material
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith that the Company remedies within 10 days after its receipt of written
notice thereof from the Employee;

     

    (iii) A
material increase in the Employee’s responsibilities or duties without a
commensurate increase in total compensation;

     

    (iv) Any
material failure by the Company to comply with and satisfy Section 5.1(c) of
this Agreement;

     

    (v) Any
failure by the Company or its Affiliates to comply with any of the other
provisions of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith that the Company remedies within
10 days after its receipt of written notice thereof from the
Employee;

     

    (vi) Any
directive requiring the Employee to be based at any office or location other
than as provided in Section 3.1(b)(ii) hereof or requiring the Employee to
travel on business to a substantially greater extent than required immediately
prior to the Change of Control; or

     

    (vii) Any
purported termination of the Employee’s employment otherwise than as expressly
permitted by this Agreement.

     

    (b) No action
or inaction by the Company shall be deemed the basis for Good Reason unless the
Employee asserts his right hereunder to terminate employment with Good Reason
prior to the first anniversary of the date on which the Employee obtained actual
knowledge of such act or omission.  Except as otherwise provided in
the prior sentence, neither the Employee’s continued employment with the Company
or its Affiliates nor any delay in the Employee’s assertion of his rights to
terminate employment with Good Reason shall be deemed to constitute a waiver of
any of the Employee’s rights hereunder.

     

    (c) Anything
in this Agreement to the contrary notwithstanding, a resignation by the Employee
during the 30-day period immediately following the first anniversary of the
Change of Control shall be deemed to be a termination for Good Reason and the
Employee shall be entitled to receive all payments and benefits hereunder
associated therewith.

     

    Section
1.10 Person.  “Person”
shall mean a natural person or entity, and shall also mean the group or
syndicate created when two or more Persons act as a syndicate or other group
(including, without limitation, a partnership or limited partnership) for the
purpose of acquiring, holding, or disposing of a security, except that “Person”
shall not include an underwriter temporarily holding a security pursuant to an
offering of the security.

     

    Section
1.11 Post-Transaction
Corporation.  Unless a Change of Control results from a
Business Combination (as defined in Section 1.4(c) hereof), “Post-Transaction
Corporation” shall mean the Company after the Change of Control.  If a
Change of Control results from a Business Combination, “Post-Transaction
Corporation” shall mean the corporation or other entity resulting from the
Business Combination unless, as a result of such Business Combination, an
ultimate parent entity controls such resulting entity, the Company or all or
substantially all of the Company’s assets either directly or indirectly, in
which case “Post-Transaction Corporation” shall mean such ultimate parent
entity.

     

    Section
1.12 Specified
Employee.  “Specified Employee” shall mean the Employee if the
Employee is a key employee under Treasury Regulations Section 1.409A-1(i)
because of final and binding action taken by the Board or its Compensation
Committee, or by operation of law or such regulation.

     

     

     

    ARTICLE
2

     

    STATUS OF CHANGE OF CONTROL
AGREEMENTS

     

    Notwithstanding
any provisions thereof, this Agreement supersedes any and all prior agreements
between the Company and the Employee that provide for severance benefits in the
event of a Change of Control of the Company, as defined therein, and is
effective as of the Agreement Date.

     

     

    
 

    ARTICLE
3

     

    CHANGE OF CONTROL
BENEFITS

     

    Section
3.1 Employment
Term and Capacity after Change of Control.

     

    (a) This
Agreement shall commence on the Agreement Date and continue in effect through
December 31, 2009; provided,
however, that, commencing on January 1, 2010 and each January 1
thereafter, the term of this Agreement has been and shall automatically be
extended for one additional year unless, not later than June 30 of the preceding
year, the Company shall have given written notice that it does not wish to
extend this Agreement; provided, further, that,
notwithstanding any such non-extension notice by the Company, if a Change of
Control of the Company shall have occurred during the original or extended term
of this Agreement, this Agreement shall continue in effect through the
second anniversary
of the Change of Control, subject to any earlier termination of the Employee’s
status as an employee pursuant to this Agreement; provided, further, that in no event
shall any termination of this Agreement result in any forfeiture of rights that
accrued prior to the date of termination.

     

    (b) During
the Employment Term, the Company hereby agrees to continue the Employee in its
employ, subject to the terms and conditions of this Agreement.  During
the Employment Term, (i) the Employee’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with those held, exercised and
assigned during the 180-day period immediately preceding the Change of Control
and (ii) the Employee’s services shall be performed during normal business hours
at the location of the Company’s principal executive office at the time of the
Change of Control, or the office or location where the Employee was employed
immediately preceding the Change of Control or any relocation of any such site
to a location that is not more than 35 miles from its location at the time of
the Change of Control.  The Employee’s position, authority, duties and
responsibilities after a Change of Control shall not be considered commensurate
in all material respects with the Employee’s position, authority, duties and
responsibilities prior to a Change of Control unless after the Change of Control
the Employee holds an equivalent position with, and exercises substantially
equivalent authority, duties and responsibilities on behalf of, either the
Post-Transaction Corporation or the Company.

     

    (c) During
the Employment Term and excluding any periods of vacation and sick leave to
which the Employee is entitled, the Employee agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Employee hereunder, to use the Employee’s reasonable best
efforts to perform faithfully such responsibilities.  During the
Employment Term it shall not be a violation of this Agreement for the Employee
to (A) serve on corporate, civic or charitable boards or committees, (B) fulfill
speaking engagements, and (C) manage personal investments, so long as such
activities do not significantly interfere with the performance of the Employee’s
responsibilities as an employee of the Company in accordance with this
Agreement.  It is expressly understood and agreed that to the extent
that any such activities have been conducted by the Employee prior to a Change
of Control, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent thereto shall not
thereafter be deemed to interfere with the performance of the Employee’s
responsibilities to the Company.

     

    Section
3.2 Compensation and
Benefits.  During the Employment Term, the Employee shall be
entitled to the following compensation and benefits:

     

    (a) Base
Salary.  The Employee shall receive an annual base salary
(“Base Salary”), which shall be paid in at least monthly
installments.  The Base Salary shall initially be equal to 12 times
the highest monthly base salary that was paid or is payable to the Employee,
including any base salary which has been earned but deferred by the Employee, by
the Company and its Affiliates with respect to any month in the 12-month period
ending with the month that immediately precedes the month in which the Change of
Control occurs.  During the Employment Term, the Employee’s Base
Salary shall be reviewed at such time as the Company undertakes a salary review
of his peer employees (but at least annually), and, to the extent that salary
increases are granted to his peer employees of the Company (or have been granted
during the immediately preceding 12-month period to his peer employees of any
Affiliate of the Company), the Employee shall be granted a salary increase
commensurate with any increase granted to his peer employees of the Company and
its Affiliates.  Any increase in Base Salary shall not serve to limit
or reduce any other obligation to the Employee under this
Agreement.  Base Salary shall not be reduced during the Employment
Term (whether or not any increase in Base Salary occurs) and, if any increase in
Base Salary occurs, the term Base Salary as utilized in this Agreement shall
refer to Base Salary as so increased from time to time.

     

    (b) Annual
Bonus.  In addition to Base Salary, the Employee shall be
awarded, for each fiscal year ending during the Employment Term, an annual cash
bonus (the “Bonus”) in an amount at least equal to the average of the annual
bonuses paid to the Employee with respect to the three fiscal years that
immediately precede the year in which the Change of Control occurs under the
Company’s annual bonus plan,
or any comparable bonus under a successor plan.  Each such
Bonus shall be paid after the end of the fiscal year and no later than the
15th
day of the third month of the fiscal year next following the fiscal year for
which the Bonus is awarded.  For purposes of determining the value of
any annual bonuses paid to the Employee in any year preceding the year in which
the Change of Control occurs, all cash and stock bonuses earned by the Employee
shall be valued as of the date of the grant.  Notwithstanding anything
to the contrary in this paragraph, the Employee shall be awarded a Bonus for
each fiscal year during the Employment Term only if the Employee is employed by
the Company at the end of such fiscal year.

     

    (c) Fringe
Benefits.  The Employee shall be entitled to fringe benefits
(including, but not limited to, any cash payments made in lieu thereof)
commensurate with those provided to his peer employees of the Company and its
Affiliates, but in no event shall such fringe benefits be less favorable than
the most favorable of those provided by the Company and its Affiliates to the
Employee at any time during the one-year period immediately preceding the Change
of Control or, if more favorable to the Employee, those provided generally at
any time after the Change of Control to his peer employees of the Company and
its Affiliates.

     

    (d) Expenses. The
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Employee in accordance with the most favorable
agreements, policies, practices and procedures of the Company and its Affiliates
in effect for the Employee at any time during the one-year period immediately
preceding the Change of Control or, if more favorable to the Employee, as in
effect generally at any time thereafter with respect to his peer employees of
the Company and its Affiliates.

     

    (e) Benefit Plans.
(i)                                           The
Employee shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to his
peer employees of the Company and its Affiliates, but in no event shall such
plans, practices, policies and programs provide the Employee with incentive
opportunities (measured with respect to both regular and special incentive
opportunities to the extent that any such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case, less favorable
than the most favorable of those provided by the Company and its Affiliates for
the Employee under any agreements, plans, practices, policies and programs as in
effect at any time during the one-year period immediately preceding the Change
of Control or, if more favorable to the Employee, those provided generally at
any time after the Change of Control to his peer employees of the Company and
its Affiliates.

     

    (ii) The
Employee and his family shall be eligible for participation in and shall receive
all benefits under any welfare benefit plans, practices, policies and programs
provided by the Company and its Affiliates (including, without limitation,
medical, prescription drug, dental, disability, salary continuance, employee
life, group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to his peer employees of the
Company and its Affiliates, but in no event shall such plans, practices,
policies and programs provide the Employee and his family with benefits, in each
case, less favorable than the most favorable of those agreements, plans,
practices, policies and programs in effect for the Employee and his family at
any time during the one-year period immediately preceding the Change of Control
or, if more favorable to the Employee and his family, those provided generally
at any time after the Change of Control to his peer employees of the Company and
its Affiliates.

     

    (iii) Without
limiting the generality of the Company’s obligations under this subsection (e),
the Company shall comply with all of its obligations under the benefit plans,
practices, policies and programs of the Company and its Affiliates that arise in
connection with a Change of Control of the Company, including without limitation
those obligations described in Section 3.5.

     

    (f) Office and Support
Staff.  The Employee shall be entitled to an office or offices
of a size and with furnishings and other appointments, and to secretarial and
other assistance, commensurate with those provided to his peer employees of the
Company and its Affiliates.

     

    (g) Vacation.  The
Employee shall be entitled to paid vacation in accordance with the most
favorable agreements, plans, policies, programs and practices of the Company and
its Affiliates as in effect for the Employee at any time during the one-year
period immediately preceding the Change of Control or, if more favorable to the
Employee, as in effect generally at any time thereafter with respect to his peer
employees of the Company and its Affiliates.

     

    Section
3.3 Obligations
upon Termination after a Change of Control.

     

    (a) Termination by Company for
Reasons other than Death, Disability or Cause or by the Employee for Good
Reason.  If, after a Change of Control and during the
Employment Term, the Company or any of its Affiliates terminates the Employee’s
employment, as defined in Treasury Regulations 1.409A-1(h)(1) (“Separation from
Service”), other than for Cause, death or Disability, or the Employee terminates
employment for Good Reason,

     

    (i) Subject
to the other terms and conditions of this Agreement (including, if applicable,
the limitations on the timing and the total amounts of payments imposed by
Sections 3.3(d) and 3.9), the Company shall pay to the Employee in a lump sum in
cash within five business days of the date of termination an amount equal to two
times the sum of (i) the amount of Base Salary in effect pursuant to Section
3.2(a) hereof at the date of termination, plus (ii) the greater of (x) the
average of the annual bonuses paid or to be paid to the Employee with respect to
the immediately preceding three fiscal years or (y) the target Bonus for which
the Employee is eligible for the fiscal year in which the date of termination
occurs, assuming achievement at the target level of the objective performance
goals established with respect to such bonus and achievement of 100% of any
subjective performance goals or criteria otherwise applicable with respect to
such bonus; provided,
however, that, if the Employee has in effect a deferral election with
respect to any percentage of the annual bonus which would otherwise become
payable with respect to the fiscal year in which termination occurs, such lump
sum payment shall be reduced by an amount equal to such percentage times the
bonus component of the lump sum payment (which reduction amount shall be
deferred in accordance with such election);

     

    (ii) The
Company shall pay to the Employee in a lump sum in cash within five business
days of the date of termination, but in no case later than the 15th day of the
third month following the end of the fiscal year of the Company in which the
termination occurs, an amount calculated by multiplying the annual bonus that
the Employee would have earned with respect to the entire fiscal year in which
termination occurs, assuming achievement at the target level of the objective
performance goals established with respect to such bonus and achievement of 100%
of any subjective performance goals or criteria otherwise applicable with
respect to such bonus, by the fraction obtained by dividing the number of days
in such year through the date of termination by 365; provided, however, that, if
the Employee has in effect a deferral election with respect to any percentage of
the annual bonus which would otherwise become payable with respect to the fiscal
year in which termination occurs, such lump sum payment shall be reduced by an
amount equal to such percentage times the lump sum payment (which reduction
amount shall be deferred in accordance with such election);

     

    (iii) If, at
the date of termination, the Company shall not yet have paid to the Employee (or
deferred in accordance with any effective deferral election by the Employee) an
annual bonus with respect to a fully completed fiscal year, the Company shall
pay to the Employee in a lump sum in cash within five business days of the date
of termination but in no case after the 15th day of
the third month following the end of the fiscal year of the Company in which the
termination occurs, an amount determined as follows: (i) if the Board (acting
directly or indirectly through any committee or subcommittee) shall have already
determined the amount of such annual bonus, such amount shall be paid, and (ii)
if the Board shall not have already determined the amount of such annual bonus,
the amount to be paid shall be the greater of the amount provided under Section
3.2(b) hereof or the annual bonus that the Employee would have earned with
respect to such completed fiscal year, based solely upon the actual level of
achievement of the objective performance goals established with respect to such
bonus and assuming the achievement of 100% of any subjective performance goals
or criteria otherwise applicable with respect to such bonus; provided, however, that, if
the Employee has in effect a deferral election with respect to any percentage of
the annual bonus which would otherwise become payable with respect to such
completed fiscal year, such lump sum payment shall be reduced by an amount equal
to such percentage times the lump sum payment (which reduction amount shall be
deferred in accordance with such election); provided, further, that any
payment under this subsection (iii) (or any payment under any other provision of
this Agreement calculated by reference to prior or target bonus amounts) shall
be payable notwithstanding any provision to the contrary set forth in any bonus
plan or program of the Company;

     

    (iv) For a
period of two years following the date of termination of employment, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy (the “Continuation Period”), the Company shall at its expense
continue on behalf of the Employee and his dependents and beneficiaries the life
insurance, disability, medical, dental and hospitalization benefits (including
any benefit under any individual benefit arrangement that covers medical, dental
or hospitalization expenses not otherwise covered under any general Company
plan) provided (x) to the Employee at any time during the one-year period prior
to the Change in Control or at any time thereafter or (y) to other
similarly-situated employees who continue in the employ of the Company or its
Affiliates during the Continuation Period.  If the Employee is a
Specified Employee governed by Section 3.3(d), to the extent that any benefits
provided to the Employee under this Section 3.3(a)(iv) are taxable to the
Employee, then, with the exception of medical insurance benefits, the value of
the aggregate amount of such taxable benefits provided to the Employee pursuant
to this Section 3.3(a)(iv) during the six month period following the date of
termination shall be limited to the amount specified by Code Section
402(g)(1)(B) for the year in which the termination occurred.  Employee
shall pay the cost of any benefits that exceed the amount specified in the
previous sentence during the six month period following the date of termination,
and shall be reimbursed in full by the Company during the seventh month after
the date of termination.  The coverage and benefits (including
deductibles and costs) provided in this Section 3.3(a)(iv) during the
Continuation Period shall be no less favorable to the Employee and his
dependents and beneficiaries than the most favorable of such coverages and
benefits during any of the periods referred to in clauses (x) or (y) above;
provided, however, in
the event of the Disability of the Employee during the Continuation Period,
disability benefits shall, to the maximum extent possible, not be paid for the
Continuation Period but shall instead commence immediately following the end of
the Continuation Period.  The Company’s obligation hereunder with
respect to the foregoing benefits shall be limited to the extent that the
Employee obtains any such benefits pursuant to a subsequent employer’s benefit
plans, in which case the Company may reduce the coverage of any benefits it is
required to provide the Employee hereunder as long as the aggregate coverages
and benefits of the combined benefit plans is no less favorable to the Employee
than the coverages and benefits required to be provided hereunder.  At
the end of the Continuation Period, the Employee shall have assigned to him, at
no cost and with no apportionment of prepaid premiums, any assignable insurance
owned by the Company that relates specifically to the Employee unless such
assignment is inconsistent with the terms of any other written arrangement with
the Employee.  To the maximum extent permitted by law, the Employee
will be eligible for coverage under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”) at the end of the Continuation Period or earlier
cessation of the Company’s obligation under the foregoing provisions of this
Section 3.3(a)(iv) (or, if the Employee shall not be so eligible for any reason,
the Company will provide equivalent coverage).

     

    (v) All
benefits that the Employee is entitled to receive pursuant to benefit plans
maintained by the Company, the Post-Transaction Corporation or their respective
Affiliates under which benefits are calculated based upon years of service or
age will be calculated by treating the Employee as having remained employed
until the second anniversary of the Change of Control;

     

    (vi) The
Company at its cost shall provide to the Employee outplacement assistance by a
reputable firm specializing in such services for the period beginning with the
termination of employment and ending upon the lapse of the Employment Term;
and

     

    (vii) The
Company shall discharge its obligations under all other applicable sections of
this Article III, including Sections 3.4, 3.5, 3.6 and 3.10.

     

    To the
extent that any amounts payable under Section 3.3(a)(iv) and (vi) are taxable
compensation and do not qualify as reimbursements and other separation payments
under Treasury Regulations Section 1.409A-1(b)(9)(v), they shall be deemed to be
reimbursements or in-kind benefits governed by Treasury Regulations Section
1.409A-3(i)(1)(iv) and, accordingly, (i) the amount of expenses eligible for
reimbursement or in-kind benefits provided during the Employee’s taxable year
shall not affect the expenses eligible for reimbursement or in-kind benefits in
any other taxable year, (ii) the reimbursement of an eligible expense must be
made on or before the last day of the Employee’s taxable year following the
taxable year in which the expense was incurred and (iii) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.

    


    To the
extent any benefits described in Section 3.3(a)(iv) and (vi) cannot be provided
pursuant to the appropriate plan or program maintained for employees, the
Company shall provide such benefits outside such plan or program at no
additional cost (including tax cost) to the Employee.

    


    The
payments and benefits provided in this Section 3.3(a) and under all of the
Company’s employee benefit and compensation plans shall be without regard to any
plan amendment made after any Change of Control that adversely affects in any
manner the computation of payments and benefits due the Employee under such plan
or the time or manner of payment of such payments and benefits.  After
a Change of Control no discretionary power of the Board or any committee thereof
shall be used in a way (and no ambiguity in any such plan shall be construed in
a way) which adversely affects in any manner any right or benefit of the
Employee under any such plan.  If the Employee becomes entitled to
receive benefits under this Section 3.3(a), the Company shall not be required to
make any cash severance payment under any other severance or salary continuation
policy, plan, agreement or arrangement in favor of other officers or employees
of the Company or its Affiliates unless such other policy, plan, agreement or
arrangement expressly provides to the contrary in a provision that specifically
states that it is intended to override the limitation of this
sentence.

    


    (b) Death; Disability;
Termination for Cause; or Voluntary Termination.  If, after a
Change of Control and during the Employment Term, the Employee’s status as an
employee is terminated (i) by reason of the Employee’s death or Disability, (ii)
by the Company for Cause or (iii) voluntarily by the Employee other than for
Good Reason, this Agreement shall terminate without further obligation to the
Employee or the Employee’s legal representatives (other than the timely payment
or provision of those already accrued to the Employee, imposed by law or imposed
pursuant to employee benefit or compensation plans, programs, practices,
policies or agreements maintained by the Company or its
Affiliates).

     

    (c) Notice of
Termination.  Any termination by the Company for Cause or by
reason of the Employee’s Disability, or by the Employee for Good Reason, shall
be communicated by a Notice of Termination to the other party given in
accordance with Section 5.2 of this Agreement.  For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee’s employment under
the provision so indicated and (iii) if the effective date of the termination is
other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than 30 days after the giving of such notice),
provided that the effective date for any termination by reason of the Employee’s
Disability shall be the 30th day after the giving of such notice, unless prior
to such 30th day the Employee shall have resumed the full-time performance of
his duties.  The failure by the Employee or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Cause, Disability or Good Reason shall not waive any right of the
Employee or the Company, respectively, hereunder or preclude the Employee or the
Company, respectively, from asserting such fact or circumstance in enforcing the
Employee’s or the Company’s rights hereunder.

     

    (d) Six Month Delay for
Specified Employees.  Notwithstanding any other provision
hereof, payments hereunder which constitute deferred compensation under Code
Section 409A and the Treasury Regulations thereunder and which are not exempt
from coverage by Code Section 409A and the Treasury Regulations thereunder shall
commence, if Employee is then a Specified Employee and payment is triggered by
his Separation from Service, on the first day of the seventh month following the
date of the Specified Employee’s Separation from Service, or, if earlier, the
date of death of the Specified Employee.  On the first day of such
seventh month or on the first day of the month following the earlier death of
the Specified Employee, the Specified Employee or his estate or spouse, as the
case may be, shall be paid in a lump sum the amount that the Specified Employee
would have been paid hereunder over the preceding six months (or, if earlier,
the months preceding the date of death) but for the fact that he was a Specified
Employee.  Nevertheless, for all other purposes of this Agreement, the
payments shall be deemed to have commenced on the date they would have had the
Employee not been a Specified Employee, and payment of any remaining benefits
shall be made as otherwise scheduled hereunder.

     

    Section
3.4 Accrued Obligations and Other
Benefits.  It is the intent of this Agreement that upon
termination of employment for any reason following a Change of Control the
Employee or his legal representatives be entitled to receive promptly, and in
addition to any other benefits specifically provided, (a) the Employee’s Base
Salary through the date of termination to the extent not theretofore paid, (b)
any accrued vacation pay, to the extent not theretofore paid, and (c) any other
amounts or benefits required to be paid or provided or which the Employee or his
legal representatives are entitled to receive under any plan, program, policy,
practice or agreement of the Company or its Affiliates, the terms and benefits
of which are hereby affirmed in their entirety (as such terms and benefits may
be supplemented or enhanced pursuant to the terms hereof).

     

    Section
3.5 Stock Options and Other
Incentives.  The foregoing benefits provided for in this
Article III are intended to be in addition to the value or benefit of any stock
options, restricted stock, performance shares or similar awards, the
exercisability, vesting or payment of which is accelerated or otherwise enhanced
upon a Change of Control pursuant to the terms of any stock option, incentive or
other similar plan or agreement heretofore or hereafter adopted by the Company
or the Post-Transaction Corporation; provided, however, that, upon
any termination of the Employee other than for Cause within two years following a Change
of Control, all of the Employee’s then-outstanding vested stock options, whether
granted before or during the Employment Term, shall remain exercisable until the
later of the 90th day after the termination date or the end of the exercise
period provided for in the applicable option agreement or plan as then in
effect, but in no event shall such exercise period continue after the date on
which such options would have expired if the Employee had remained an employee
of the Company, the Post-Transaction Corporation or one of their respective
Affiliates.

     

    Section
3.6 Legal
Fees.

     

    (a) The
Company shall pay the Employee’s reasonable fees for legal and other related
expenses associated with any disputes arising hereunder or under any other
agreements, arrangements or understandings regarding the Employee’s employment
with the Company (including, without limitation, all agreements, arrangements
and understandings regarding bonuses, equity-based incentives, employee benefits
or other compensation matters) if either a court of competent jurisdiction or an
arbitrator shall render a final judgment or an arbitrator’s final decision in
favor of the Employee on the issues in such dispute, from which there is no
further right of appeal. If it shall be determined in such judicial adjudication
or arbitration that the Employee is successful on some of the issues in such
dispute, but not all, then the Employee shall be entitled to receive a portion
of such legal fees and other expenses as shall be appropriately
prorated.  All payments due under this Section 3.6 shall be made
promptly, but in no event later than 30 days after the final judgment or
decision is rendered.

     

    (b) For
purposes of this Section 3.6, the phrase “reasonable fees for legal and other
related expenses” shall mean only the reasonable fees incurred by the Employee
for legal and other related expenses, to the extent and only to the extent to
which either (a) the reimbursement or payment of such fees and expenses by the
Company does not constitute “compensation” within the meaning of that word where
it appears in the phrase “a legally binding right during a taxable year to
compensation” in the first sentence of Treasury Regulations Section
1.409A-1(b)(1); or (b) the reimbursement or payment of such fees and expenses by
the Company is a settlement or award resolving bona fide legal claims based
on wrongful termination, employment discrimination, the Fair Labor Standards
Act, or worker’s compensation statutes, including claims under applicable
Federal, state, local, or foreign laws, or for reimbursements or payments of
reasonable attorneys fees or other reasonable expenses incurred by a service
provider related to such bona fide legal claims described in Treasury
Regulations Section 1.409A-1(b)(10).

     

    Section
3.7 Set-Off;
Mitigation.  After a Change of Control, the obligations of the
Company and its Affiliates to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company or its Affiliates may have against the Employee or others other than
the Company’s right to reduce welfare benefits under the circumstances described
in Section 3.3(a)(iv).  It is the intent of this Agreement that in no
event shall the Employee be obligated to seek other employment or take any other
action to mitigate the amounts or benefits payable to the Employee under any of
the provisions of this Agreement.

     

    Section
3.8 Certain Pre-Change-of-Control
Terminations.  Notwithstanding any other provision of this
Agreement, the Employee’s employment shall be deemed to have been terminated
following a Change of Control by the Company without Cause (and the Employee
shall be entitled  to receive all payments and benefits associated
therewith) if the Employee’s employment is terminated by the Company or any of
its Affiliates without Cause prior to a Change of Control (whether or not a
Change of Control actually occurs) and the Employee can reasonably demonstrate
that such termination was at the request or direction of a third party who has
taken steps designed to effect a Change of Control or otherwise arose in
connection with or in anticipation of a Change of Control.

     

    Section
3.9 Excise Taxes.

     

    (a) Notwithstanding
any other provisions of this Agreement, in the event that any payment or benefit
received or to be received by the Employee in connection with the Change of
Control or the termination of the Employee’s employment under this Agreement or
any other agreement between the Company and the Employee (all such payments and
benefits, including the payments and benefits under Section 3.3 hereof, being
hereinafter called “Total Payments”) would be subject (in whole or in part), to
an excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
cash payments under Section 3.3 hereof shall first be reduced, and the noncash
payments and benefits under the other sections hereof shall thereafter be
reduced, to the extent necessary so that no portion of the Total Payments is
subject to the Excise Tax but only if the net amount of such Total Payments, as
so reduced (and after subtracting the net amount of federal, state and local
income and employment taxes on such reduced Total Payments), is greater than or
equal to the net amount of such Total Payments without such reduction (but after
subtracting the net amount of federal, state and local income and employment
taxes on such Total Payments and the amount of Excise Tax to which the Employee
would be subject in respect of such unreduced Total Payments); provided, however, that the
Employee may elect to have the noncash payments and benefits hereof reduced (or
eliminated) prior to any reduction of the cash payments under Section 3.3
hereof.

     

    (b) For
purposes of determining whether and the extent to which the Total Payments will
be subject to the Excise Tax, (i) no portion of the Total Payments the receipt
or enjoyment of which the Employee shall have waived at such time and in such
manner as not to constitute a “payment” within the meaning of Section 280G(b) of
the Code shall be taken into account, (ii) no portion of the Total Payments
shall be taken into account which, in the opinion of tax counsel (“Tax Counsel”)
reasonably acceptable to the Employee and selected by the accounting firm (the
“Auditor”) which was, immediately prior to a Change of Control or other event
giving rise to a potential Excise Tax, the Company’s independent auditor, does
not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of
the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in
calculating the Excise Tax, no portion of such Total Payments shall be taken
into account which, in the opinion of Tax Counsel, constitutes reasonable
compensation for services actually rendered, within the meaning of Section
280G(b)(4)(B) of the Code, in excess of the “Base Amount” (within the meaning
set forth in Section 280G(b)(3) of the Code) allocable to such reasonable
compensation, and (iii) the value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by the
Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.

     

    (c) At the
time that payments are made under this Agreement, the Post-Transaction
Corporation shall provide the Employee with a written statement setting forth
the manner in which such payments were calculated and the basis for such
calculations including, without limitation, any opinions or other advice the
Post-Transaction Corporation has received from Tax Counsel, the Auditor or other
advisors or consultants (and any such opinions or advice which are in writing
shall be attached to the statement).

     

    (d) The
Company shall be responsible for all charges of the Tax Counsel and the
Auditor.

     

    Section
3.10 Indemnification
and Insurance.

     

    (a) If, in
connection with any agreement related to a transaction that results in a Change
of Control of the Company, an undertaking is made to provide the Board with
rights to indemnification from the Company (or from any other party to such
agreement), the Employee shall, upon effectiveness of the Change of Control, by
virtue of this Agreement be entitled to the same rights to indemnification as
are provided to the Board pursuant to such agreement.  Otherwise, the
Employee shall be entitled to indemnification rights on terms no less favorable
to the Employee than those available under any Company indemnification
agreements or the articles of incorporation, bylaws or resolutions of the
Company at any time after the Change of Control to his peer employees of the
Company.  Such indemnification rights shall be with respect to all
claims, actions, suits or proceedings to which the Employee is or is threatened
to be made a party that arise out of or are connected to his services at any
time prior to the termination of his employment, without regard to whether such
claims, actions, suits or proceedings are made, asserted or arise during or
after the Employment Term.

     

    (b) If, in
connection with any agreement related to a transaction that results in a Change
of Control of the Company, an undertaking is made to provide the Board with
continued coverage following the Change of Control under one or more directors
and officers liability insurance policies, then the Employee shall, upon
effectiveness of the Change of Control, by virtue of this Agreement be entitled
to the same rights to continued coverage under such directors and officers
liability insurance policies as are provided to the Board, and the Company shall
take any steps necessary to give effect to this provision.  Otherwise,
the Company shall agree to cover the Employee under any directors and officers
liability insurance policies as are provided generally at any time after the
Change of Control to his peer employees of the Company.

     

     

     

    ARTICLE
4

     

    NONDISCLOSURE AND
PROPRIETARY RIGHTS

     

    Section
4.1 Confidential
Information.  For purposes of this Agreement, the term
“Confidential Information” means any information, knowledge or data of any
nature and in any form (including information that is electronically transmitted
or stored on any form of magnetic or electronic storage media) relating to the
past, current or prospective business or operations of the Company and its
Affiliates, that at the time or times concerned is not generally known to
persons engaged in businesses similar to those conducted or contemplated by the
Company and its Affiliates (other than information known by such persons through
a violation of an obligation of confidentiality to the Company), including
information relating to the Company’s or its Affiliates’ products and services,
business plans, operating procedures, files, plans, proposals, trade secrets,
supplier information, consultants’ reports, marketing, shipping or other
technical studies, vessel or maintenance records, employment or personnel data,
marketing data, strategies or techniques, financial reports, budgets,
projections, cost analyses, price lists, employee lists, customer records,
customer lists, proprietary computer software, and internal notes and memoranda
relating to any of the foregoing.

     

    Section
4.2 Nondisclosure of Confidential
Information.  During the period beginning
upon  receipt of the cash payments contemplated by Section 3.3 hereof
and ending on the third anniversary of the date of the Employee’s termination
specified in the Notice of Termination, the Employee agrees (a) not to
communicate, divulge or make available to any person or entity (other than the
Company or its Affiliates) any Confidential Information, except upon the prior
written authorization of the Company or as may be required by law or legal
process, and (b) to deliver, upon request,  promptly to the Company
any Confidential Information in his possession, including any duplicates thereof
and any notes or other records the Employee has prepared with respect
thereto.  In the event that the provisions of any applicable law or
the order of any court would require the Employee to disclose or otherwise make
available any Confidential Information, the Employee will give the Company
prompt prior written notice of such required disclosure and an opportunity to
contest the requirement of such disclosure or apply for a protective order with
respect to such Confidential Information by appropriate
proceedings.

     

    Section
4.3 Injunctive Relief; Other
Remedies.  The Employee acknowledges that a breach by the
Employee of Section 4.2 could cause immediate and irreparable harm to the
Company for which an adequate monetary remedy may not
exist.  Consequently, the Employee agrees that, in the event of a
breach or threatened breach by the Employee of the provisions of Section 4.2,
the Company will be entitled to injunctive relief restraining the Employee from
such violation without the necessity of proof of actual damage or the posting of
any bond, except as required by non-waivable, applicable law.  Nothing
herein, however, will be construed as prohibiting the Company from pursuing any
other remedy at law or in equity to which the Company may be entitled under
applicable law in the event of a breach or threatened breach of Section 4.2 by
the Employee; provided,
however, that in no event shall an asserted violation of the provisions
of Section 4.2 constitute a basis for deferring, withholding or offsetting any
amounts otherwise payable to the Employee hereunder.

     

    Section
4.4 Employee’s Understanding of this
Article.  The Employee acknowledges that the duration of the
covenants contained in Article IV are the result of arm’s length bargaining and
are fair and reasonable. It is the desire and intent of the parties that the
provisions of this Article IV be enforced to the fullest extent permitted under
applicable law, whether now or hereafter in effect.

     

     

     

    ARTICLE
5

     

    MISCELLANEOUS

     

    Section
5.1 Binding Effect;
Successors.

     

    (a) This
Agreement shall be binding upon and inure to the benefit of the Company and any
of its successors or assigns.

     

    (b) This
Agreement is personal to the Employee and shall not be assignable by the
Employee without the written consent of the Company (there being no obligation
to give such consent) other than such rights or benefits as are transferred by
will or the laws of descent and distribution, which shall inure to the benefit
of the Employee’s legal representatives.

     

    (c) The
Company shall require any successor to or assignee of (whether direct or
indirect, by purchase, share exchange, merger, consolidation or otherwise) all
or substantially all of the assets or businesses of the Company (i) to assume
unconditionally and expressly this Agreement and (ii) to agree to perform or to
cause to be performed all of the obligations under this Agreement in the same
manner and to the same extent as would have been required of the Company had no
assignment or succession occurred, such assumption to be set forth in a writing
reasonably satisfactory to the Employee.  The Company shall also
require all entities that control or that after the transaction will control
(directly or indirectly) the Company or any such successor or assignee to agree
to cause to be performed all of the obligations under this Agreement, such
agreement to be set forth in a writing reasonably satisfactory to the
Employee.

     

    (d) The
obligations of the Company and the Employee which by their nature may require
either partial or total performance after the expiration of the term of the
Agreement shall survive such expiration.

     

    Section
5.2 Notices.  All
notices hereunder must be in writing and shall be deemed to have been given upon
receipt of delivery by: (a) hand, (b) certified or registered mail, postage
prepaid, return receipt requested, (c) a nationally recognized overnight courier
service or (d) telecopy transmission with confirmation of
receipt.  All such notices must be addressed as follows:

     

    If to the
Company, to:

    


    International
Shipholding Corporation

    11 North
Water Street

    Suite
18290

    Mobile,
Alabama 36602

    Attn: Chief Executive
Officer

    


    If to the
Employee, to:

    


    Manuel G.
Estrada

    c/o 11
North Water Street

    Suite
18290

    Mobile,
Alabama 36602

     (or,
if the Employee is no longer employed at such address,

    to the
Employee’s last known principal residence reflected in

    the
Company’s records)

    


    or such
other address as to which any party hereto may have notified the other in
writing.

    


    Section
5.3 Governing Law.  This
Agreement shall be construed and enforced in accordance with and governed by the
internal laws of the State of Delaware without regard to principles of conflict
of laws.

     

    Section
5.4 Withholding.  The
Employee agrees that the Company has the right to withhold, from the amounts
payable pursuant to this Agreement, all amounts required to be withheld under
applicable income or employment tax laws, or as otherwise stated in documents
granting rights that are affected by this Agreement.

     

    Section
5.5 Amendment.  No
provision of this Agreement may be modified or amended except by an instrument
in writing signed by both parties.

     

    Section
5.6 Severability.  If
any term or provision of this Agreement, or the application thereof to any
Person or circumstance, shall at any time or to any extent be invalid, illegal
or unenforceable in any respect as written, the Employee and the Company intend
for any court construing this Agreement to modify or limit such provision so as
to render it valid and enforceable to the fullest extent allowed by
law.  Any such provision that is not susceptible of such reformation
shall be ignored so as to not affect any other term or provision hereof, and the
remainder of this Agreement, or the application of such term or provision to
Persons or circumstances other than those as to which it is held invalid,
illegal or unenforceable, shall not be affected thereby and shall be valid and
enforced to the fullest extent permitted by law.

     

    Section
5.7 Waiver of
Breach.  Except as expressly provided herein to the contrary,
the failure by any party to enforce any of its rights hereunder shall not be
deemed to be a waiver of such rights, unless such waiver is an express written
waiver.  The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach thereof.

     

    Section
5.8 Remedies Not
Exclusive.  No remedy specified herein shall be deemed to be
such party’s exclusive remedy, and accordingly, in addition to all of the rights
and remedies provided for in this Agreement, the parties shall have all other
rights and remedies provided to them by applicable law, rule or regulation,
including without limitation the right to claim interest with respect to any
payment not timely made hereunder.

     

    Section
5.9 Company’s Reservation of
Rights.  The Employee acknowledges and understands that (i) the
Employee is employed at will by either the Company or one of its Affiliates (the
“Employer”), (ii) the Employee serves at the pleasure of the board of directors
of the Employer, and (iii) the Employer has the right at any time to terminate
the Employee’s status as an employee, or to change or diminish his status during
the Employment Term, subject to the rights of the Employee to claim the benefits
conferred by this Agreement.  Notwithstanding any other provisions of
this Agreement to the contrary, this Agreement shall not entitle the Employee or
his legal representatives to any severance or other benefits of any kind prior
to a Change of Control or to any such benefits if Employee is not employed by
the Company or one of its Affiliates on the date of a Change of Control, except
in each case for those rights afforded under Section 3.8.

     

    Section
5.10 Non-exclusivity of
Rights.  Subject to Section 5.9, nothing in this Agreement
shall prevent or limit the Employee’s continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
Affiliates and for which the Employee may qualify, nor shall anything herein
limit or otherwise restrict such rights as the Employee may have under any
contract or agreement with the Company or any of its Affiliates.  The
Employee shall not be obligated to furnish a release of any rights or claims
against the Company or its Affiliates as a condition of receiving benefits
hereunder.

     

    Section
5.11 Section
409A.  Notwithstanding any other provision of this Agreement,
it is the intention of the parties to this Agreement that no payment or
entitlement pursuant to this Agreement will give rise to any adverse tax
consequences to the Employee under Code Section 409A and Treasury Regulations
and other interpretive guidance issued thereunder, including that issued after
the date hereof (collectively, “Section 409A”). This Agreement and any
amendments hereto shall be interpreted to that end and (i) to the maximum extent
permitted by law, no effect shall be given to any provision herein, any
amendment hereto or any action taken hereunder in a manner that reasonably could
be expected to give rise to adverse tax consequences under Section 409A and (ii)
the parties shall take any corrective action reasonably within their control
that is necessary to avoid such adverse tax consequences.

     

    Section
5.12 Demand for
Benefits.  Unless otherwise provided herein, the payment or
payments due hereunder shall be paid to the Employee without the need for
demand, and to a beneficiary upon the receipt of the beneficiary’s address and
social security number.  Nevertheless, the Employee or a Person
claiming to be a beneficiary who claims entitlement to a benefit can file a
claim for benefits hereunder with the Company.  Unless otherwise
provided herein, the Company shall accept or reject the claim within 15 business
days of its receipt.  If the claim is denied, the Company shall give
the reason for denial in a written notice that refers to the provision of this
Agreement that forms the basis of the denial.

     

    Section
5.13 Authority.  The
Company represents and warrants that this Agreement was duly authorized by the
Compensation Committee of the Board and by the Board on July 30, 2008, and that
no other corporate proceedings are necessary to authorize the Company’s
execution, delivery and performance of this Agreement.

     

    Section
5.14 Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.

     

    Section
5.15 Interpretation.  Any
reference to any section of the Code or the Treasury Regulations shall be deemed
to also refer to any successor provisions thereto.  Any reference to
the term “including” shall be deemed to be followed by the words “without
limitation”.

     

    Section
5.16 Employee
Acknowledgment.  The Employee acknowledges (a) that he has
consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement, and (b) that he has read and
understands the Agreement, is fully aware of its legal effect, and has entered
into it freely based on his own judgment.

     

    [Signatures
appear on following page]

     

    
 

    
 

    


     

    IN WITNESS WHEREOF, the
Company and the Employee have caused this Change of Control Agreement to be
executed as of the Agreement Date.

    


    INTERNATIONAL SHIPHOLDING

    CORPORATION

    


    


    By:           /s/ Niels M.
Johnsen                                                                

          
Niels M. Johnsen

          
Chairman and Chief Executive Officer

    


    


    


    EMPLOYEE:

    


    


    /s/ Manuel G.
Estrada                                                      

                
Manuel G. Estrada